Hi-Crush profit skyrockets 315 percent in second quarter

One of the largest West Texas oil and gas drillers has bought into a local sand mine in order to cut its costs. It could reduce costs for Pioneer Natural Resources from having to buy imported frac sand similar to this sand mined in Minnesota.

Profits for frac sand company Hi-Crush Partners LP skyrocketed more than 300 percent in the second quarter as its sand sales topped 3 million tons.

The Houston-based company earned $68 million or 68 cents a unit in the three months that ended June 30, up 315.2 percent compared to the $16.4 million or 18 cents a unit it earned in the second quarter of 2017.

Sales of frac sand, which when combined with chemicals and water is used in the oil and gas industry to produce petroleum from shale rock, for the company topped 3 million tons, a 43.8 percent increase over the 2.1 million tons of sand it sold in the second quarter of 2017.

The company operates mines in West Texas near Kermit and Wisconsin. The company is active in many U.S. shale plays including the Permian Basin in West Texas, Eagle Ford Shale in South Texas, and Marcellus gas play in Ohio and Pennsylvania.

Sales of sand in the second quarter increased 16 percent over the first quarter, when the company sold just over 2.6 million tons of sand.

Much of the sand used in hydraulic fracturing, or fracking, has been shipped in from northern states like Wisconsin. But with oil and gas exploration and production companies looking to cut costs, more sand mines are now being based closer to shale oil and gas plays.

Alpine Silica, which operates a sand mine in Kermit, Texas, announced in June plans to build and open a 3 million-ton a year sand plant in Van Horn.

Rye Druzin is a business reporter who has reported in Texas since he moved to Midland in August 2014. He covers CPS Energy, refiners, manufacturing and oil and gas for the business desk. A native Californian, Rye earned his bachelors of arts in International Affairs from Lewis & Clark College in 2013.